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TheStreet Open House

Australian Treasurer Rules Out Austerity Measures

By ROD McGUIRK

CANBERRA, Australia (AP) â¿¿ Australia's treasurer says his economic blueprint for the fiscal year ahead will support jobs and growth without European-style austerity measures aimed at reining in the national deficit.

Treasurer Wayne Swan will unveil the budget in Parliament on Tuesday that is likely to be the last for the center-left Labor Party government, widely expected to be defeated at elections on Sept. 14.

In December, his government abandoned a pledge to return the budget to surplus in the current fiscal year that ends on June 30. The cooling mining boom and a stubbornly high currency have slashed tax revenue from corporate profits.

"In this Budget we have made the choice to set out a pathway to surplus while supporting jobs and growth in the face of an uncertain world," Swan wrote in a statement Tuesday.

"Others have a different view and want to pursue austerity measures, but the ongoing destruction of the European path of cutting to the bone is not for a country as strong and proud as Australia," he added.

A year ago, the government forecast a 1.5 billion Australian dollar ($1.5 billion) surplus for the current fiscal year that would have made Australia the first major wealthy country to balance its books since the global financial crisis. But economists now predict a deficit of between AU$10 billion and AU$20 billion.

The government has announced a new levy to help pay for a new national disability insurance program and has promised more funding for schools.

Chinese demand for raw materials such as iron ore and coal kept Australia out of recession during the global economic crisis. But the mining investment boom is expected to peak this calendar year and the non-mining sector is not growing fast enough to make up for the mining retreat.

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